In the last week of March 2026, Ontario announced the two most significant housing affordability measures the province has seen in years. Together, they could reduce the cost of a new home by more than $200,000. If you’ve been thinking about building a custom home, adding a garden suite, or converting a property into a multi-unit — the math just changed.
Here’s what was announced, what qualifies, and what it means for homeowners in Kitchener, Waterloo, Cambridge, and the surrounding region.
What Was Announced
1. Full HST Removal on New Homes (March 25, 2026)
Premier Doug Ford announced that the full 13% Harmonized Sales Tax will be removed for buyers of new homes valued up to $1 million. The federal government agreed to cost-share the 5% federal portion, making the combined rebate worth up to $130,000.
The program runs for one year: April 1, 2026 to March 31, 2027. Ontario’s Finance Minister Peter Bethlenfalvy was blunt about the timeline: “This is a one-year sale.” There are no current plans to extend it.
2. Development Charges Cut by 50% (March 30, 2026)
Five days later, Prime Minister Mark Carney and Premier Ford announced a joint $8.8 billion investment to reduce municipal development charges across Ontario. Development charges are fees municipalities collect from builders to fund infrastructure — roads, sewers, water, parks, transit. They’re baked into the price of every new home and have been climbing for years.
The deal: municipalities that agree to cut development charges by up to 50% receive provincial and federal infrastructure funding to offset the lost revenue. The reductions stay in place for three years, targeting municipalities covering 80% of Ontario’s population.
How Much Could You Actually Save?
| Home Value | HST Savings | Est. DC Savings | Combined |
|---|---|---|---|
| $600,000 | $78,000 | $25,000–$40,000 | $103,000–$118,000 |
| $800,000 | $104,000 | $25,000–$40,000 | $129,000–$144,000 |
| $1,000,000 | $130,000 | $25,000–$40,000 | $155,000–$170,000 |
| $1,500,000 | $130,000 | $25,000–$40,000 | $155,000–$170,000 |
Development charge savings are estimates and will vary by municipality. Actual DC reductions in Kitchener, Waterloo, and Cambridge have not yet been confirmed.
For homes between $1.5M and $1.85M, the rebate decreases proportionally from $130,000 down to $24,000. Above $1.85M, you get the existing $24,000 provincial rebate only. The rebate is typically applied as a credit at closing, not as a cheque you receive after the fact.
Who Qualifies?
The expanded HST rebate applies to two categories of buyers:
Primary residence buyers: The purchase agreement must be signed between April 1, 2026 and March 31, 2027. Construction must begin on or before December 31, 2028, and be substantially completed by December 31, 2031. The home must be used as your primary place of residence.
Rental property builders: If you’re building a new home as a residential rental property (including purpose-built rental units), you may qualify under the New Residential Rental Property Rebate with the same signing window.
This is not limited to first-time buyers. Anyone purchasing a qualifying new home in the eligible window can claim the rebate.
What This Means for Custom Home Builds in Kitchener-Waterloo
If you’ve been considering a custom home build in the Kitchener-Waterloo-Cambridge region, the one-year HST window creates a real decision point. The savings are substantial enough to change what’s financially feasible — a $130,000 rebate on a $1M custom build is the equivalent of your entire kitchen budget, or the difference between a standard build and a high-performance one.
But the window is tight. To qualify, you need a signed purchase agreement before March 31, 2027. That means the design, engineering, permitting, and budgeting work needs to happen now — not next year. A typical custom home takes 2–4 months in the design and permit phase before construction even begins.
Here’s a realistic timeline for a homeowner starting today:
- April–June 2026: Site consultation, design development, engineering, and permit application
- July–September 2026: Permit approval and construction start
- Late 2027–Early 2028: Substantial completion
That fits within the eligibility criteria. But if you wait until fall to start the process, the permit timeline alone could push your agreement past the March 2027 deadline.
What About ADUs and Garden Suites?
This is where it gets interesting for homeowners who aren’t necessarily building a new primary residence but want to add a rental unit to their property.
Garden suites and secondary suites built as residential rental properties may qualify under the expanded Residential Rental Property Rebate. The same signing window applies (April 1, 2026 – March 31, 2027). This could make a garden suite project significantly more affordable — a $300,000–$400,000 garden suite could see $39,000–$52,000 in HST savings alone.
Combined with the existing Waterloo Region ADU grant programs (up to $20,000 from the City of Waterloo, up to $25,000 from the Region), the total incentives for building a secondary suite have never been higher.
If you’ve been exploring a garden suite or basement apartment conversion, see our Garden Suite & ADU Cost Guide and our guide to ADU rules under Ontario’s Bill 23.
Development Charges: What to Watch Locally
The $8.8 billion development charge fund is the bigger long-term story. Development charges in the Kitchener-Waterloo region currently add tens of thousands of dollars to the cost of every new home. A 50% reduction would meaningfully change the economics of new construction.
But there’s a catch: municipalities must agree to cut their charges to receive the infrastructure funding. Premier Ford was direct about this: municipalities that don’t reduce development charges won’t receive any money.
Kitchener, Waterloo, and Cambridge haven’t formally announced their positions yet. Watch for council motions and budget amendments in the coming weeks. The municipalities that move first will attract the most new development investment.
It’s also worth noting that development charge reductions are supposed to flow through to lower home prices — but whether builders actually pass the full savings to buyers is another question. If you’re comparing new construction quotes before and after these changes take effect, pay close attention to whether the numbers actually reflect lower charges or whether they’ve been absorbed into higher margins.
The Bottom Line
These two announcements represent the most significant housing affordability intervention Ontario has made in years. For homeowners in the Kitchener-Waterloo-Cambridge region who have been weighing a custom home build, garden suite, or new construction project, the financial landscape just shifted in your favour — but only for a limited time.
The HST rebate is a one-year window. The development charge reductions are a three-year window. Both reward people who move quickly.
If you’ve been waiting for the right time to build, this is the strongest financial incentive Ontario has offered in a generation.
Frequently Asked Questions
Yes. If you sign a purchase agreement with a builder between April 1, 2026 and March 31, 2027, construction begins by December 31, 2028, and is substantially completed by December 31, 2031, a custom build qualifies for the full rebate.
ADUs and garden suites built as residential rental properties may qualify under the New Residential Rental Property Rebate, provided the purchase agreement is signed in the eligible window. Consult CRA guidelines for your specific situation.
Up to $130,000 in HST savings on homes up to $1.5M, plus potentially tens of thousands in reduced development charges. Combined savings could exceed $200,000 depending on your municipality.
The program targets municipalities covering 80% of Ontario’s population. Kitchener, Waterloo, and Cambridge are expected to participate, but each municipality must agree to reduce charges to receive provincial and federal infrastructure funding. Watch for local council announcements.
No. The expanded HST rebate is a one-year measure from April 1, 2026 to March 31, 2027. Ontario’s Finance Minister has stated there are no current plans to extend it.
No. The HST rebate applies to new home construction only — not to renovations, additions, or improvements to existing homes. Renovations continue to be subject to HST as before.
Thinking About Building in 2026?
Caliber Contracting builds custom homes and garden suites across Kitchener, Waterloo, Cambridge, and Paris. If you want to take advantage of the HST rebate window, the design and permit process needs to start now.
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